AI Leadership News and the Expanding Role of Independent Appraisers
In this issue:
- Bank OZK’s New Approach: Why their review stands out
- Illinois House Bill 4319: What it means for appraisers
- 7-Hour USPAP Courses: Classroom and synchronous available in your area
- Crypto & Real Estate: Tokenization, valuation, and the role of independent Appraisers
Leadership Update
Appraisal Institute Board of Directors Elects Smedmore Montgomery Bernard, Jr., MAI, as 2026 Vice President
Smedmore Montgomery Bernard, Jr., MAI, was elected 2026 Appraisal Institute vice president by the AI Board of Directors on January 7, 2026.
Bernard was nominated for the position by the AI National Nominating Committee at its December 4 meeting in Chicago. The committee’s nomination was submitted to the Board of Directors by National Nominating Committee Chair Sandy Adomatis, SRA, in accordance with the Appraisal Institute Bylaws.
As 2026 vice president, Bernard will serve as the Appraisal Institute’s 2027 president-elect, 2028 president, and 2029 immediate past president. In addition, he will chair the Finance Committee in 2026 and the National Nominating Committee in 2029.
Insights
Why Bank OZK’s Appraisal Review Transparency Stands Out
In an industry where appraisal review is often discussed only in vague terms, Bank OZK has taken a notably different, and commendable, approach. In its recent investor presentation, Bank OZK went beyond the standard boilerplate language about “sound underwriting” and “independent appraisals” that dominates most bank disclosures. Instead, the bank offered investors a clear window into how seriously it treats collateral valuation and appraisal review as part of its risk-management framework, noting that its Real Estate Specialties Group loan reviews are conducted by certified appraisers holding the MAI designation.
This level of detail is uncommon, and it matters.
Transparency Is Rare in Appraisal Review
Most banks limit public discussion of appraisal review to high-level assurances. While internal appraisal policies are closely scrutinized by regulators, they are rarely described in any meaningful way to investors or the broader market. Specifics about review processes, controls, and oversight are typically viewed as internal or proprietary.
Bank OZK chose a different path.
By explicitly highlighting its appraisal review protocols, particularly in the context of its commercial real estate and construction lending, the bank sent a clear message: valuation discipline is not a box-checking exercise, but a core component of its credit culture.
Why This Matters, Especially in CRE Lending
For banks with significant exposure to commercial real estate, appraisal quality is not ancillary, it is foundational. Loan-to-value ratios, stress testing, covenant enforcement, and loss mitigation all depend on credible, well-reviewed valuations.
Bank OZK’s willingness to discuss its appraisal review practices helps investors understand how the bank manages risk, not just that it does. In a sector where CRE concentrations can raise legitimate concerns, this transparency reinforces confidence in the institution’s underwriting discipline and long-term risk management.
A Signal to the Market
By elevating appraisal review in its investor communications, Bank OZK is doing more than providing comfort to shareholders. It is implicitly acknowledging the central role of credible valuation in maintaining safety and soundness, particularly in periods of market volatility, interest-rate uncertainty, and evolving real estate fundamentals.
For appraisers and valuation professionals, this kind of disclosure is also encouraging. It reflects a recognition that appraisal review is a specialized, value-added function, not merely a compliance requirement.
Setting a Higher Bar
While few banks currently match this level of openness, Bank OZK’s approach may well serve as a model for others, especially those with concentrated CRE exposure. Greater transparency around valuation governance benefits investors, regulators, and the broader real estate finance ecosystem.
In a business built on risk assessment, clarity matters. Bank OZK’s detailed discussion of its appraisal review practices is a reminder that strong valuation oversight is not just good governance, it’s good banking.
Your Benefits
CREXI Intelligence Exclusive Webinar
Unlock smarter valuation insights with Crexi Intelligence. Join us for an exclusive webinar to see how Appraisal Institute members can leverage Crexi Intelligence's nationwide comps, leasing trends, loan data, and market reports to strengthen appraisal workflows.
January 28, 2026 - 11 a.m. CT
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Crypto & Real Estate: Tokenization, Valuation, and the Role of Independent Appraisers
January 15, 2026 – 11:00 a.m. CT
As blockchain and cryptocurrency technologies continue to disrupt traditional finance, real estate is emerging as a frontier for innovation through tokenization. This panel will explore how property assets are being fractionalized and traded on blockchain platforms, the legal and regulatory implications, and how valuation professionals fit into this rapidly evolving landscape.
Speakers:
Peter Gaffney, Director of DeFi & Digital Trading, Inveniam
Jackson Blau, Manager of DeFi & Crypto, Inveniam
Advocacy Updates
Illinois Bill Highlights the Role of Independent Appraisals in Data Center Impacts
A newly introduced bill in the Illinois General Assembly highlights the increasingly important role of professional real estate appraisers in resolving land use conflicts tied to large-scale data center development. Illinois House Bill 4319 (2025, 2026), the Property Owner Protection from Data Center Impacts Act, was introduced on January 7, 2026, by Rep. Jed Davis (R, 75). The legislation establishes a framework allowing property owners to seek compensation for measurable harm caused by the construction or operation of nearby data centers, with valuation determinations grounded in professional appraisal analysis.
HB 4319 makes a property owner eligible for compensation if the property is located within 1,000 feet of a data center and has experienced measurable harm, including:
- Reduction in fair market value
- Loss of business revenue
- Environmental or operational impacts such as noise, vibration, traffic, stormwater burden, or lighting
The bill acknowledges that certain impacts, such as relocation burdens and operational disruptions, may create economic harm beyond traditional valuation measures, while still requiring appraisal-supported evidence for real property compensation.
A Structured, Independent Valuation Framework
Rather than relying on administrative estimates or litigation-driven claims, HB 4319 establishes a structured, appraisal-based valuation process designed to ensure independence, balance, and credibility:
- Both the property owner and the data center developer must obtain appraisals prepared by state-certified or -licensed appraisers.
- If the appraisals differ by more than 10%, a third appraiser is randomly selected by the state to reconcile the valuation using professional judgment.
- All appraisal costs are borne by the data center developer or owner.
This approach positions appraisers as neutral experts who are central to resolving valuation disputes arising from emerging and intensive land uses.
Why This Matters Beyond Illinois
As data center development accelerates nationwide, policymakers are increasingly challenged to balance infrastructure growth with property owner protections. HB 4319 is notable for placing independent appraisal analysis at the center of that balance, offering a framework that other states may look to as similar issues emerge.
The Appraisal Institute’s Government Affairs team will continue tracking the bill and promoting its core concepts, particularly the role of qualified appraisers, in policy discussions across the country.
Real Estate Horizons
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Until Next week
Team Appraisal Institute
